Answer
Anyone who is in legal possession of the goods can
pledge them. The parties who can make a valid pledge are:
a) The owner of the goods
himself.
b) Mercantile agent (Section
178 of Contract Act 1872)
c) A person, who has obtained
possession of goods by fraud, mis-representation coercion or undue influence, such person
shall create a valid pledge provided the following conditions are fulfilled.
i) The contract has not been
rescinded before he enters into the contract of pledge.
ii) The pledge acts in good
faith without knowledge of the defective title of the pledger. This principle
does not apply to a thief who has no title to goods and can give none.
d) Joint owner with the consent
of other co-owner (s).
e) A person who, with the
consent of the seller, obtains possession of the goods or documents of title to
the goods for which the title has not yet passed to that person provided the
pledge acts in good faith and without notice of the pledger’s defect in the
title therto.
f) A seller who is in possession
of the goods after selling them, can create a valid pledge provided the pledge
must act in good faith and without notice of the previous sale.
g) A pledge may repledge the
goods for borrowing money to the extent of his interest in the said goods.
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